What factors do you need to consider to better control your freight costs? Are there hidden charges you should be aware of? Is the domestic freight market predictable enough to make qualified decisions? Let’s see if there’s a practical road to understanding trucking rates.

If your products are shipped by truck, you’re paying for it. Whether you have your own fleet or have to rely on a third party, having a reasonable knowledge of the factors influencing your trucking costs just makes sense.

As we uncover the information you need, it’s important to realize there are two distinct facets in discussion: trucking rates and truck freight rates. Trucking rates apply to you directly (your costs as a business owner), whereas truck freight rates are the costs incurred by carriers – owner operators and trucking companies.

How to Calculate Trucking Rates

For most physical business, freight and trucking costs are a significant and often revolving part of your operating overhead. Therefore it makes sense to understand the basics so you can break down these costs into smaller increments that help you determine the best trucking rate per mile.

Trucking freight rates are calculated using a per-mile (or kilometre) basis. Therefore, the most important metric when calculating truck rates is the number of miles between your point of pickup and final destination.

Having an average rate per mile for trucking and reasonably accurate information of current freight rates is essential for predicting your shipping costs, providing quotes and negotiating shipping rates with your customers.

What is a Truck Freight Rate?

A truck freight rate is the price a specific broker or shipper will pay a carrier to haul a load. Because the average trucking company only only one to two trucks, the aggregated number of small businesses becomes staggering. This also means there can be a huge variation in pricing from company to company.

Is this a problem or an advantage? When you realize just how competitive the domestic freight market is, you certainly have an opportunity for a win. The trick is in being informed and doing your homework through due diligence.

Factors That Determine Truck Freight Rates

There are number of standardized factors used to calculate truck freight rates. Some of them are predictable or fixed, others are variable. As a group, they’re all taken into consideration when determining truck freight rates.

1. Distance

Whether local or long haul, the distance between start and finish points is an important part of determining trucking rates per mile.

2. Weight

The next most significant factor is the weight of the shipment. For instance, moving crates full of dumbbells is going to cost more than boxes full of ping pong balls.

3. Density

Shipment density is another factor that determines the volume of space a shipment will take up in the truck. This in turn impacts your trucking per mile rates. For all intents and purposes, calculating the shipment density is fairly straight forward: divide the shipment weight by its cubic feet. In other words, shipment weight divided by cubic feet = shipment density.

4. Base Rate

All trucking carriers have established base rates for shipments. Although most rates are usually cited per $100 dollars, they will vary based on the carrier and transporting lane. Your base rate also includes both fixed and variable costs and variable costs. Fixed costs are items such as insurance and equipment leases. Variable costs are those that fluctuate such as fuels expenses and driver pay.

5. Classification

Freight classification plays a significant role in freight rates. For instance, hauling hazardous materials is far different and requires extra precautions compared to shipping stuffed animals.

The National Motor Freight Traffic Association (NMFTA) has defined 18 classes of shipments that affect freight rates per mile. Freight classification is determined by factors such as:

• Product density
• Value of goods
• Handling needs
• Stow-ability
• Liability

Types of Trucking and Haul Rates

The type of truck used for transport will affect the overall cost of trucking. For instance, you’ll need a far more powerful vehicle to haul an oversize bulldozer compared to a vintage automobile. In a similar fashion, you’d want to ship frozen foods in a reefer rather than a flatbed.

Heavy Haul Trucks

Heavy haul trucking companies will use common per mile cost factors such as:

• Fuel expenses
• Repair and maintenance expenses
• insurance for trucks
• Highway tolls and fares

If you’re moving heavy products, a good rule of thumb is to keep an eye on both local and national trucking rates.

Flatbed Trucks

As for flatbed truck rates per mile, the national rates average $3.14 (USD) per mile. However, depending on your location a shipping points, specific areas may have higher or lower rates.

Fair prices for flatbed truck services consider things like:

• Trailer type
• Load-to-truck ratio: the number of loads vs your available trucks
• Cargo weight
• Destination
• Other services such as oversize loads, warehousing, loading and unloading

Refrigerated Trucks

Refrigerated trucks or reefers are equipped with a refrigeration unit for goods that need low temperature control. Since they consume more fuel, reefer freight rates are higher than that of other trucks of the same relative sizes. This difference ultimately factors into your freight prices per mile.

Dry Vans

Perhaps the most common type of truck you’ll see on the highways, dry vans have a non-temperature-controlled sealed trailer and represent a fair benchmark for determining the average cost per mile of truckload freight.

What’s the Going Rate for Trucking Per Mile?

In order to understand the scope of the trucking industry and determine a competitive rate per mile, you need to know how much trucking companies actually charge per mile. Their cost per mile is influenced by such factors as:

• Fuel
• Repairs and maintenance
• Insurance
• Roadway Tolls

For many operations, financing is also rolled into the cost per mile. Typical financing charges for trucks and trailers can range from 0%-30% of revenue.

As of July 2021, trucking rates per mile remain steady. Here are the current rates for the most popular freight truck types:

Trucking rates (in USD) for the most popular freight truck types within the last few years have hovered around:

• $2.30 to 2.86 per mile for dry vans
• $3.19 per mile for reefers, with lower rates of $2.47 found in the Northeast
• $3.14 per mile for the average flatbed
• $2.95 to $3.76 per mile for heavy haul according to heavyhaulandoversized.com

As we’ve experienced recently, inflation and interest rates have been impacting the economy. Resulting in rising fuel prices over the past year thus creating a huge variable when calculating transportation rates.

Company vs Owner-Operator Trucking Rates

In contrast to company drivers working exclusively for a trucking firm, owner-operators own or lease their own trucks. As a form of networking, owner-operators usually work together with a trucking company in order to find trucking jobs and leverage back-office support.

This autonomy comes at a cost though, as owner-operators have to deal with additional stress and the burdens of financing, maintenance, health insurance and related operational expenses largely on their own.

In terms of trucking rates, owner-operators generally earn an average of 75% percent of the loads they take. The balance of the percentage goes to the trucking company.

For a deep dive into the intricacies associated with the operational costs of trucking, please refer to this comprehensive industry pdf: https://truckingresearch.org/wp-content/uploads/2022/08/ATRI-Operational-Cost-of-Trucking-2022.pdf

Trucking Rate Terminology You Need to Know

Building a knowledge base on trucking rates also means understanding the terminology. Other than  pricing, there are a few trucking industry terms you should be familiar with:

Consignor: The entity that sends the freight to its counterpart the consignee.

Consignee: The entity that receives the freight from the consignor.

Carrier: A business that offers shipping services.

Bill of Lading (BOL): Also called a freight bill, the bill-of-lading is a record of all details of the shipment and the agreement between a carrier and the shipper.

Loss and Damage: Loss and damage rates only cover shipments in transit or in storage facility operated by the carrier.

Full Truckload (FTL): Also termed TL, an LTL shipment requires the use of a whole truck.

Less Than Truckload (LTL): Shipments that don’t utilize the full capacity of a truck.

Drayage: Drayage is a form of short-haul trucking that connects the different modes of shipping such as ocean freight or air freight.

Pallets (or Skids): Plastic or wooden stacking platforms that usually measure around 40″ by 48″.

SKU: A Stock Keeping Unit, a method of recording individual items of a different kind, size, or freight.

CWT: A standard shipping weight unit equivalent to 100 pounds.

Finding the Best Trucking Rates is Not as Hard as You Might Think

From trucker shortages, supply chain issues to the prospect of extra charges, the trucking landscape is full of – at times unpredictable pitfalls. But with a solid understanding of the trucking field and its players, you increase your ability to react with agility.

Contact Brimich and Packaging today and talk to an experienced professional who can quote trucking rates tailored to meet your company’s specific needs.

Shipments don’t always go as they should, and your logistics costs can rise. When you have to cancel a pickup or delivery, you need to know the consequences and how to deal with them.

Let’s face it, sometimes stuff happens. Extra fees such as TONU charges can undermine your profitability. In this article, we’ll look at why the charge occurs and what you can do to avoid it.

What is TONU in Logistics?

TONU, an acronym that stands for “Truck Order Not Used”, is a standard logistics term used to describe a last-minute cancellation fee. In the transportation industry, not every delivery or pickup goes according to plan. Circumstances can change and a customer may decide to cancel a prearranged, agreed to appointment.

Although we don’t like having to pay extra fees of any kind, the TONU fee helps balance the scales of time and effort.

Why Do Companies Charge a TONU Fee?

The TONU fee exists to help carriers recoup some of their losses. As the old saying goes, “If the wheels aren’t turning, the truck isn’t earning.”. From a transportation company’s point of view, trailers and trucks should always be moving. In other words, the time they sit idle is lost potential income.

The trucking industry is massive, and with so many vehicles on the road handling shipments every day, you can bet there are going to be instances where TONU comes into play. According to one of North Americas leading trucking associations:

10.93 billion tons of freight (primary shipments only) was transported by trucks in 2021, representing 72.2% of total domestic tonnage shipped.

Source: Trucking.org

For carriers, having to charge a TONU fee on top of having their time wasted is in itself very frustrating. It takes time and effort to plan a route and prepare a truck for a pending order. In worse case scenarios, a driver can already be on the road or waiting at the pick-up location when they receive a cancellation notification.

What Causes a Truck Order Not Used Charge?

The trucking industry is massive. With so many vehicles on the road handling shipments every day, you can bet there are going to be instances where TONU comes into play. According to one of North Americas leading trucking associations:

10.93 billion tons of freight (primary shipments only) was transported by trucks in 2021, representing 72.2% of total domestic tonnage shipped.

Source: Trucking.org

Since we depend on the trucking and logistics industries to move so much on a constant basis, there are a wide variety of reasons that can trigger a TONU fee. Some of these include:

• Supply chain delays
• Last-minute shipment cancellations
• A load is not ready for pickup
• Construction site delays
• Inappropriate transportation ordered
• Incorrect pickup time entries
• Unexpected manufacturing delays
• General human error

Most of us like to think our plans will roll out like clockwork, but as you can see, the future is not always predictable.

Examples of Truck Ordered Not Used

Let’s say a request is put in for a trucker to deliver a twenty foot shipping container, but at the last minute the order is changed to a forty foot shipping container. If the change is made outside of the agreed timeline limits, which can be anywhere from 4 to 24 hours, this may result in a Truck Ordered Not Used charge.

Another instance could involve a carrier scheduled to pick up a load at an agreed day and time, but the manufacturer discovers an error in product spec at the last minute and has to rework the shipment. Because the manufacturer has no choice but to cancel the expected pickup until the order is corrected, a TONU fee is charged.

How Much is a Typical TONU Charge?

The amount of a TONU charge can be related to the size of the vehicle ordered or the transportation company’s policies – or a combination of both. Typical TONU charges start at about $150.00 (USD) for a dry van, box truck or prime mover. With refrigerated (reefer) shipments or special equipment containers, the charge can escalate to about $300.00.

On average, the industry standard Truck Order Not Used fee is rated at $250 (USD). An experienced logistics partner understands the need to anticipate shipping issues and will negotiate the TONU charge ahead of time with the trucker and dispatcher as a contingency. When the instance arises, the TONU charge will be invoiced as soon as the official cancellation is received.

Is TONU Just for Cancellation Only?

In a word, yes. A TONU fee is specifically related to an order that’s completely cancelled. Other accessorial shipping penalties such as layovers and detentions have their own separate fee structures. Some transportation companies will charge by the hour whereas others charge a flat or daily fee depending on the nature of the delay.

For instance, a Layover Fee can be charged when the driver gets delayed by the shipper or receiver by 1 or 2 days. A Detention Fee can be incurred if a driver is delayed at the point of pick-up or delivery for longer than the allowed by the Bill of Lading grace period.

How are TONU Charges Collected or Paid?

In the event of a TONU charge, there has to be proof of a breach of agreement. The trucker can verify a charge by showing a record of the time the booking was made, trip confirmation, arrival at the requested location if applicable and lastly, cancellation the arrangement by the customer.

The trucking company will then generate a TONU fee invoice to the customer or the freight forwarder based on the trucking arrangement. If there is a third party involved, such as a freight forwarder, logistics company or freight broker, the truck may opt to charge the third party directly depending on the agreement.

Generally speaking, the party that scheduled the service or arranged a service agreement with the trucking company will be liable to pay under the terms and conditions laid out.

For freight forwarders, it’s common practice to pass TONU charges along to the customer in the event of a cancellation or last minute change to the pickup/delivery agreement.

How to Avoid TONU Charges

As mentioned, sometimes things are just out of your control. However, there are a few things you can keep in mind to help avoid TONU charges:

1. Know Your Contract: You should have a solid understanding of the details of your shipping contract. You can also expect to incur TONU charges at some point so it’s a good idea to be familiar with the specific conditions that trigger the charge, how much it’s going to cost you and how it gets paid.

2. Communicate: Maintaining open lines of communication is key to avoiding a TONU charges and ensuring successful pickup and delivery executions. Should a problem arise or your plans change, communicate with the trucking company immediately to see if the situation can be resolved without penalty.

3. Set Expectations: Although it’s difficult to anticipate all scenarios, it’s great practice to discuss how timelines, conditions, rates and payments are to be treated by your transportation provider in the real world should the need arise. Once again, an experienced logistics partner will be up front about policies and be glad to answer any questions you may have.

4. Plan Ahead: Good planning starts with good organization. Make sure everyone on your team is familiar with the details of your shipping and transportation schedule ahead of time. It’s also a good idea to have a contingency plan in place so your team knows how to deal with shipping cancellations effectively.

Dealing with a single carrier may be easier, but in many situations, overall total shipping costs can be better controlled by leveraging the individual expertise of multiple individual carriers.

In such cases, the logistics also become more complicated. Therefor, in order to achieve the full benefits of multimodal and intermodal freight transport systems, it’s up to you to understand exactly what they are, the terminologies, and how they work.

Multimodal Transportation

Multimodal transportation is a combination of at least two or more different modes, such as air, sea, rail, or road, to move your cargo from one point to another using one single bill of lading for the entire journey.

Since the movement can often be from country to country. but the contracted carrier issues a Combined Transport Bill of Lading or a Multimodal Bill of Lading.

Though it includes the various modes and carriers for transportation, it also means the carrier is fully liable for the entire carriage.

Put differently, multimodal shipping is where one company or one contract handles all legs of the journey. This means the same company is responsible for moving your shipment in all legs, in all modes.

This can be done in a couple of different ways: you could partner with a company that has all of these modes available to them, or set up a single contract for yourself to use an agent.

As a representative, the agent does all the negotiation on the back end for you while you only have one contract to keep track of. The agent could also take on the  responsibility of coordinating loading, unloading, and managing delays.

Example of multimodal transport

As an example, let’s look at a freight shipment moving from Hamburg to Shanghai using multimodal transportation. After the cargo is packed in the containers in Hamburg. the carrier sends their own designated trucking company to pick up the containers and bring them to the Hamburg Port.

After its journey by sea to Shanghai, it’s then brought to its final destination by a trucking company working under the carrier. During the entire process, the carrier takes full responsibility from the point of pick-up to the final destination with one contract serving the entire stretch.

Advantages

The multimodal  transportation method holds several advantages, the first being less cost for you the shipper. Companies that handle multimodal shipping have systems in place to handle delays in one leg of the shipment with respect to the other legs without you needing to be involved.

Therefor, the insulated multimodal system provides a convenient one-stop-shop service where every single aspect is handled by one provider, giving you that ease and peace of mind.

Advantages of multimodal transport:

• Shipment tracking efficiency – continuous monitoring with one transport carrier delivering from door to door
• access to remote parts of the world with responsibility and liability assumed by one transport carrier
• efficiency in delivery time and management
• minimal logistics coordination at the expenses of a shipper

A good example for multimodal transport is Rail-Truck or overland solutions. Carriers like UPS and DHL  are offering such services, for example along China’s Belt-and-Road initiative for goods to move from Asia to Europe.

An additional example is Sea-Air, which is less expensive than air freight alone, but quicker than shipping only.

Relying on one contract minimizes coordination and communication costs for you as a shipper. As mentioned, with Multimodal it’s easy to track your cargo’s progress because you only use one tracking interface instead of several.

Intermodal Transportation

In simple terms, intermodal transportation is defined as the movement of cargo from the point of origin to its destination by several modes of transport where each of these modes have different carriers responsible, each with its own independent contract.

In short, each leg of the shipment is handled by a separate transport carrier. Therefor, the shipper has to deal with several contracts, one with each transport carrier that handles their specific leg of the shipment.

Getting the best routing is not the same as getting the best total shipping cost. Though in some cases, using multiple transport carriers is sometimes better in achieving the best total door-to-door shipping cost. The downside is that it requires more logistics coordination and hands-on involvement.

Example of intermodal transport

As an example, let’s say you need to move a large amount of freight to another site, and both sites are land locked and on different continents.

This could mean that in order to move your cargo, you’ll need to contact a trucking company to transport your shipment by road to a rail yard. Once the shipment is delivered to the rail yard, it then moves by train to a shipping port.

The freight is then loaded onto a cargo ship and moved overseas to another port. From there it’s unloaded and moved to another rail carrier.

To complete the journey, the shipment is trucked from the rail yard to your final destination location.

As a result of using intermodal shipping, each leg of that shipment is handled by a separate company. This means you have to have several contracts, one with each carrier to handle their specific leg of the shipment.

Advantages

The advantages that come with using intermodal transportation. One of which the ability to negotiate terms separately with each company.

The downside is it comes at the cost of more overhead for you. You’ll need to keep track of several contracts with different companies. And you may be responsible for managing delays, as one company may be blind to the delays another company might be having.

Advantages of Intermodal transportation:

• Shippers can negotiate lower rates for each transport leg
• benefit from flexibility and specialized handing of goods at different ports
• reduce their carbon footprint by choosing environmentally friendly carriers
• more access to equipment, control capacities, and select transit schedules

Is Multimodal or Intermodal Transport Better for You?

Both Intermodal and Multimodal freight transport systems have their own advantages and disadvantages with one element setting the two transport modes apart: with Multimodal you sign only one contract, and with Intermodal, more than one.

The two modes of transport optimize delivery times and reduce shipping costs. However, many businesses tend to favour multimodal transportation when balancing cost and convenience.

Whether you’re choosing less-than-truckload (LTL), ocean freight, or intermodal shipping, most, if not all, service providers won’t ship your freight without a Bill Of Lading or BOL.

What is a Bill Of Lading in Shipping?

Considering how important the BOL is, what is it exactly? What does a Bill of Lading mean? Here’s a specific definition:

A bill of lading (BL or BoL) is a legal document issued by a carrier to a shipper that details the type, quantity and destination of the goods being carried. A bill of lading also serves as a shipment receipt when the carrier delivers the goods at a predetermined destination. This document must accompany the shipped products, no matter the form of transportation, and must be signed by an authorized representative from the carrier, shipper and receiver.

Moreover, the BOL contains more specific relevant information about your shipment to enable logistics providers to process and price their service accurately. These details are (but not limited to):

• Commodity description
• Freight dimensions
• Billing party information
• Shipping/purchase order numbers
• BOL number
• Pickup and delivery addresses
• Contact information
• Total weight
• Piece count
• Freight class
• NMFC code
• Additional services
• Special instructions

Do I Need a Bill of Lading?

If you want a recognized carrier to move your goods legally and responsibly – yes!

The Bill of Lading is the receipt of the transaction between you and your carrier. It’s a legally binding document that can also serve as a document of title, which allows the entity holding it to claim ownership of the freight.

Who Issues the Bill of Lading?

A bill of lading is usually issued per shipment or container by your carrier, broker, or forwarder. You just have to fill out the details in the appropriate blank form.

The specifics or type of form will depend on your requirements as the shipper. It can also be determined by the purchase order, kind of products you’re shipping, letter of credit, and many other factors.

When it comes to truckloads however, it’s actually common in full truckload (FTL) for shippers to use their own BOL. Additionally, some carriers will allow their clients to make their own BOL for LTL shipments.

How to Read a Bill of Lading

Here’s a brief list common terms associated with a BOL:

• Names and addresses of both shipper and receiver (consignee) . Both should be easily readable in the document.
• Purchase orders or reference numbers required for pickup upon delivery.
• Special instructions that may be needed to ensure the integrity of the package.
• Date of pickup that the consignee can expect the goods to arrive.
• Description of items: quantity of goods, dimensions and weight, and information about the material.
• Packaging type such as cartons, crates, pallets or drums used during shipping.
• NMFC code if required that corresponds to the freight class of the shipment.
• Dept. of Transportation hazardous material destination when required to disclose hazardous items handling measures.
• BOL number given by the issuer of the BOL.

These details when required must be notated on the BOL or you may risk not having your freight picked up, which could result in a dry run charge from the carrier.

Additionally, if your shipment is LTL, you’ll also need to include the freight class of the shipment.

What are the Different Types of BOL?

Types of BOLs are diverse to cover the vast range of products that require shipping. Depending on the contract, there are different terms used in different shipping scenarios.

For easy reference, here’s a list of common BOL types:

1. Order bill of lading

The Order BOL type states that the cargo will only be delivered to the person or party determined by the shipper – often according to the consignee. To ensure safety of delivery, the bill must be verified by the agent or middleman responsible for the delivery. Also considered as a negotiable bill of lading, it is the most used type of BOL in the world.

2. Master bill of lading

A Master BOL is issued by the shipping line, trucking company, or basically the owner/operator of the transport vessel. This is also the type of BOL your freight forwarder or broker has with the carrier containing most of the same detailed information about your cargo.

3. Straight bill of lading

Also known as a non-negotiable bill of lading, this BOL consigns the cargo to one specific person – neither the endorser nor the endorsee is prioritized when claiming ownership of the delivery. More often than not, the consignee has to make an advance payment before they can receive the goods. Plus, depending on the laws of the destination country, he or she may or may not be required to show the original bill upon receipt.

4. Open bill of lading

Also known as a negotiable bill of lading, this type defines that the cargo can be transferred from one consignee to another with the consignee’s signature. The consignee is usually a named party pre-determined by either the carrier, a bank, or the importer.

5. House bill of lading

Also known as a forwarder’s bill of lading, this type of BOL is given by the forwarder, broker, or the Non-Vessel Operating Common Carrier (NVOCC) to their clients.

6. Bearer bill of lading

This type specifies the cargo will be delivered to whoever possesses the bill of lading. The consignee may be unspecified originally or be negotiated upon delivery. It’s usually used for bulk shipments released in smaller quantities.

7. Received for shipment bill of lading

This type is given by the carrier confirming that the goods have been received, but not yet laden onto the ship or transport vessel. This is typically used as a temporary BOL when the vessel is late and will be replaced by a Shipped BOL when the cargo is finally loaded on the ship.

8. Shipped bill of lading

This type of BOL issued when the cargo is onboard the vessel and now legally binds the owner of the vessel with the carrier.

9. Ocean bill of lading

The Ocean Bill of Lading allows the cargo to be transported via ocean freight, both nationally and internationally.

10. Inland bill of lading

This BOL type allows the carrier to transport the shipment freight via land, via roadway or rail, but only within domestic boundaries.

11. Airway bill of lading

As the name implies, this type is issued by an air freight company or forwarder and is usually considered non-negotiable – unless the cargo is consigned to the order of the shipper.

12. Clean bill of lading

Denoting a certain condition of the cargo, this type states goods are loaded in good condition and cannot explicitly declare a defective condition of the packaging and/or the products inside. If the shipment ultimately turns out damaged or is missing in quantity, it is replaced by a Dirty BOL.

13. Dirty bill of lading

The Dirty BOL has a clause stating the shipowner can declare the condition of the cargo as “dirty”. Meaning the cargo is indeed broken, or incorrect quantity of goods have been specified, there’s significant damage in the packaging, etc.

14. Through bill of lading

The Through BOL serves as a legal document that allows the shipment to directly pass through domestic and international borders. It may be transferred from one distribution center to another, and be transported across multiple modes of transport. It is also required to include an Inland or Ocean BOL depending on the final destination of the shipment.

15. Combined transport bill of lading

Additionally known as a Multimodal Transport BOL, this type states that there will be at least two modes of transport involved when shipping the cargo.

16. Direct bill of lading

The Direct Bill of Lading is for shipments to be picked up and delivered by the same vessel.

17. Stale bill of lading

This type of BOL defines that when the cargo arrives at the port before the bill of lading itself, the current BOL is then considered “stale”.

18. Surrender bill of lading

The Surrender BOL is issued by an exporter to an importer and signifies the transfer of ownership once the freight is received.

Using the Correct Bill of Lading: Why It’s So Important

Every detail in a BOL so your cargo must be nailed down to ensure your shipment is delivered with the least amount of hiccups as possible.

Using the right BOL will avoid unforeseen freight charges and unnecessary time constraints – such as the shipment being delivered to the wrong address.

This means the BOL contains all the most relevant details about your shipment including the terms and conditions favorable for you.

With continuing evolution of the supply chain, customer expectations of fast deliveries right to their door are changing as well.

Thanks to successful models developed by Amazon and eBay, customers are not only comfortable, but prefer to shop online – especially in a compromised environment due to a pandemic.

Because of this shift in how customer’s view shipping, getting your products from A to B, or from the factory to their door is more critical than ever.

Of course your company is committed to excellence and customer satisfaction – that’s a given. Therefor, awareness of the most common shipping mistakes just might help you avoid those awkward moments when a problem does need to be explained.

Mistake #1: Listing the Wrong Address

It seems obvious enough to avoid, but it happens all the time, and at many different levels. It’s a stupid mistake that can cost you dearly and delay your shipment arriving on time.

If you list the wrong address, or if it’s entered incorrectly for you – thanks autofill, your delivery will end up at the wrong place. As a result, it’ll have to be tracked down and re-routed to the right address.

This costs time and resources in re-routing fees, missed deadlines and most unfortunately, unhappy customers.

Mistake #2: Improper Packaging

Sketchy packaging means damaged freight, which means unhappy customers and again, higher costs.

According to experts, the structural integrity of most any shipping container suffers significant break-down over the course of a single journey; and that’s for boxes that are correctly packed and sized.

When the package is NOT sized or sized correctly, the potential for damage rises exponentially. With the amount of time and care you put into creating your fantastic product, why would you risk all that work with inappropriate shipping boxes or using boxes with a sloppy fit?

Of course different products require varying amounts of care and protection, much of which depending on an item’s size, weight, and fragility.

Even with the right packaging, make sure that your goods are secured properly to their pallet: not filled with overhanging packages. Instead, column-stack or interlock-stack goods. Make sure they’re secured with stretch wrap and bands along with cushioning to increase shock absorption, strength, and stability.

A conversation with a preferred carrier will go a long way, and a little extra time is worth the cost of making sure your goods arrive intact and in good condition.

Mistake #3: Bill Of Lading (BOL) Inaccuracies

The key document required for every freight shipment – The Bill of Lading, one of the essential shipping terms to be familiar with, is a legally binding document giving both the carrier and the driver all the details to necessary to process and invoice the freight accurately.

The BOL includes:

• The date of the shipment
• The number of units in the shipment
• The exact weight of shipment
• The Shipper’s and Consignee’s full names and addresses
• The Freight classification for the items being shipped
• Type of packaging
• The declared value of goods
• A description of items being shipped: name and material of manufacture
• A Purchase Order or special account numbers used between businesses for tracking
• Special instructions for the carrier to ensure prompt delivery – such as closing times
• If necessary, a note regarding potentially hazardous materials

Considering the amount of specific information that must be documented, it’s not uncommon for shippers to use the wrong commodity description; enter the wrong piece count; notify party; or fail to read the terms and conditions of the bill of lading just to name a few.

Mistakes like these can be extremely costly and easily avoided by carefully filling out the information. Engaging the help of someone to double-check also goes a long way to ensuring its accuracy.

Going the extra mile may seem unnecessary, but you should remind yourself what’s at stake when things aren’t 100% accurate – your products, and you business’ reputation.

Mistake #4: Incorrect Weight or Freight Class Listing

Yes, it is part of the BOL, but it’s important enough to have its own listing because improperly listed freight class or weight can be a serious and costly mistake.

If you try to guess your shipment’s weight without the aid of a weigh station, you will inevitably receive additional fees – the same goes for improper freight class.

Because a lower class is associated with a lower price, shippers sometimes try to list their shipment in the lowest possible class. But if they’re incorrect, the reclassification fee will be much higher than the margin from one class to another.

This may not seem like a big deal to some, but if you’re shipping hundreds or thousands of freight loads a year, those additional fees can add up fast. Not to mention the damage it does to a reputation.

Mistake #5: No Freight Insurance

In order to cut costs, shippers may opt to avoid insurance. It may be cheaper in the short run, but the law of averages will come back to bite you.

The simple frequency of continuous shipping over time will inevitably lead to damage of one kind or another. It may be it an overturned truck, theft, natural disasters, an accident, or a host of other problems capable of ruining a shipment.

Human error has to be taken into consideration. Plus the likelihood of a mistake occurring increases with travel distance and package handling.

The relatively small price of insuring the goods saves you from worrying about the inevitable mishaps that are bound to happen over time, and save you from what could be financially crippling replacement costs of an entire shipment.

Mistake #6: Not Palletizing

Palletizing takes time and effort, but it’s far better than having a loose stack of packages free to shift around while on route and get damaged.

Furthermore, most LTL companies won’t allow you to ship without using a pallet. If you don’t, they’ll palletize your goods and pass the cost of doing so on to you. While this can be negotiable point, it’s far less expensive to do it yourself.

Mistake #7: Overpaying for Freight

This last “mistake” may seem obvious, but it’s one mistake made far too frequently.

Working with a trusted 3PL partner is one of the best ways to avoid the mistakes listed, and more, and keep your freight costs low at the same time.

An experienced 3PL partner audits your freight invoices to ensure your company is paying the correct amount for your shipments. If in case you are overpaying, they’ll work directly with your preferred carriers to provide accurate pricing, or correct other issues.

Companies with well-oiled supply chains are better positioned to meet consumer demands, especially during times of crisis. Surveys show that during times of crisis, consumers will buy from any brand that can supply essential goods.

Transparent, effective freight tracking helps ensure a positive shipping experience which generates repeat customers – and ultimately benefits your business.

How Does Freight Tracking Work?

In a nutshell, it’s safe to assume a package needs to move from Point A to Point B.

1. Order confirmation. Shippers pick an established, trusted carrier to move their shipments. These can be a third-party logistics (3PL) provider, broker, or carrier directly to move their freight. After establishing the lowest shipping rate, the shipper will confirm the order with the shipping company.
2. Order Numbers. After order confirmation, the carrier assigns each package a Progressive Rotating Order number (PRO) – perhaps the most important element in the tracking process.
3. Bill of Lading. The carrier adds the PRO number to the shipment’s Bill of Lading (BOL). The BOL is a document that contains all of the shipment’s information, including the shipper and receiver’s names, pickup and delivery addresses, dimensions and weight, packaging information, value, and a description of the goods.
4. Generate shipping labels. The carrier combines the PRO number with its Standard Carrier Alpha Code (SCAC) to form a scannable barcode. Carriers place these shipping labels on the outside of each pallet for easy scanning.
5. Freight is ready to ship.

Depending on whether freight moves via less-than truckload (LTL), truckload (TL), or shared truckload (STL) service,

Once loaded, the shipment will either travel directly to its destination or make multiple stops along the way depending on the the method: less-than truckload (LTL), truckload (TL), or shared truckload (STL) service.

Every time the carrier loads or unloads the shipment, the shipping label is scanned. This updates the freight’s location automatically within the carrier’s tracking system, which allows shippers to track freight from pickup to delivery.

Essential Freight Tracking Terminologies

It’s helpful to understand what each delivery update actually means. Here’s a quick shipment tracking glossary for you.

• Estimated delivery: When providing a rate quote, the shipping company gives you an estimated delivery date by estimating the delivery date according to the scheduled pickup date, and the distance to the freight’s final destination.
• Ordered: You (the shipper) have confirmation and agree to use a particular company to transport your shipment.
• Dispatched: The carrier is on its way to the agreed pickup location.
• Picked up: The carrier has successfully picked up the shipment!
• In transit: This lets you monitor your shipment’s last known location, allowing you to watch its progress from pickup through delivery.
• Out for delivery: The shipment is out for delivery, and will arrive that day.
• Delivered: The carrier has successfully unloaded the shipment and delivered it to its final destination.
• Shipment delayed: This could happen for any number of reasons, and may be within or outside of your control. Investigate the cause of delay, then inform the rest of your supply chain partners so they can prepare for a change of plans.
• Refusal by consignee: Again, there can be several reasons for a consignee delivery refusal. For instance, the consignee may require a delivery appointment (which should have been noted), or may require a liftgate (and the delivery truck lacks one).

The Differences Between TL, LTL, and STL Tracking

If you fully understand LTL and TL shipping methods, it may be immediately apparent why TL tracking is more accurate than LTL shipment tracking. If not, more:

LTL

Despite low costs and its appeal to shippers that aren’t able to fill a complete truck with their freight, standard LTL shipping is a bit convoluted.

LTL freight travels through the hub-and-spoke system on its way to delivery, stopping at multiple hubs and terminals and trans-loading at each one. The very nature of this method increases the risk of damage along what can be a convoluted route.

In context, LTL tracking is about as complex as the network it travels through.

TL

TL shipping is also known as “Exclusive Use”, from the fact that the truck moves freight from a single shipper without shared delivery space.

TL shipments are load-to-ride, meaning once a package enters the truck, it doesn’t exit until it reaches its the final destination.

Because the freight is only handled at its origin and destination, the risk of damage for exclusive-use shipments is far less than that of LTL shipments. TL tracking is also much more accurate than LTL tracking thanks to minimal number of stops and parties involved.

Ever since the Federal Motor Carrier Safety Administration (FMCSA) mandated the use of electronic logging devices (ELDs) back in 2015, tracking truckloads is more accurate than ever.

ELDs automatically record and upload truck locations to carriers’ fleet management software, helping dispatchers stay on top of truck status in real time.

With this accurate tracking technology, locating TL freight (which never leaves the trailer) is easy, especially when compared to pinpointing freight moving via LTL service.

STL

Shared truckloads move LTL freight using the TL method, meaning packages only load and offload once therefor avoiding trans-loading at terminals.

Because shared truckload shipments skip the hub-and-spoke system entirely, they’re much easier to track than LTL shipments.

Final Thoughts On Freight Tracking

As you can see, freight tracking requires a significant amount of expertise and technology. As a business owner though, a better understanding of the landscape, and the pros and cons of its methodologies, will ultimately help you make better, qualified decisions.

At Brimich Logistics, we dedicate ourselves to providing our shippers with the best, most frictionless experience possible. Contact us today for a quote!

Have you looked at your shipping processes in order to save money and control overhead? As a small business owner, there’s a chance you may be spending too much and not getting nearly enough in return.

Smart shipping management requires a basic understanding of industry terminology. The small investment in the time it takes to familiarize yourself with industry-specific jargon will pay dividends by reducing miscommunication.

If your company doesn’t have its own shipping department, you should be aware of shipping terms and conditions, especially before conducting direct imports. No one expects you to learn all the intricacies, but knowing the basics will keep you out of the dark, and out of trouble.

Therefor, here’s a quick reference sheet you can refer to to acquaint yourself with what may be some unfamiliar shipping terminology.

Shipping, Freight, and Logistics Terms

1. Accessorial Charge

   Additional fees charged for add-on services or equipment required for the delivery of your cargo.

2. Backhaul

   When a driver transports cargo during the return trip of a commercial vehicle, is known as a backhaul. This helps the cargo vehicle maximize their trips.

3. Bill of Lading

   A document issued by a carrier to a shipper, signed by the captain, agent, or owner of a vessel. Furnishing written evidence of receipt of the goods (cargo), the conditions on which transportation is made (contract of carriage), and the engagement to deliver goods at the prescribed port of destination to the lawful holder of the bill of lading.

4. Customs Broker

   An individual or firm licensed by, in this case by U.S. Customs & Border Protection, to act for importers in handling the sequence of custom formalities and other details essential to the legal and speedy exporting and importing of goods.

5. Carrier

   A legal entity or entitled individual in the business of transporting passengers or goods for hire. Shipping lines, airlines, trucking companies, and railroad companies are all carriers.

6. Container

   A single rigid, sealed, reusable metal box in which merchandise is shipped by vessel, truck or rail. Ocean shipping containers are generally 20, 40, 45 feet long. Ocean freight container types include: standard, high cube, hardtop, open top, flat, platform, insulated, refrigerated, etc.

7. Detention

   The process of holding a carrier’s driver and/or truck trailer beyond a certain stated period of “free time”, often resulting in the assessment of detention charges. The delay in clearing goods through customs resulting in storage and other charges. The prevention, by government authority, of a vessel and/or cargo leaving port.

8. Cartage and Drayage

   Cartage is the movement of goods for short distances, usually by truck. It is also referred to the charge to pick up, move and deliver good short distances.
   Drayage is the charge made for hauling freight or carts, drays or trucks.

9. Freight Forwarder

   A person engaged in the business of assembling, collection, consolidating, shipping and distributing less-than-carload or less-than-truckload freight. Additionally, a person acting as agent in the trans-shipping of freight to or from foreign countries and the clearing of freight through customs. Often including full preparation of documents, arranging for shipping, warehousing, delivery and export clearance.

10. Hazmat

    Short for “hazardous materials”, which essentially is any material that could cause potential harm to anything or anyone it comes into contact with. Special endorsements are needed from all parties involved to legally transport hazardous materials.

11. Incoterms

    Short for International Commercial Terms, which are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC). Incoterm define basic shipping terms.

12. Intermodal

    Cargo that is shipped using multiple forms of transportation, such as rail transport and cargo trucks.

13. Lane

    A regular route of transportation taken most often by commercial transporters.

14. LTL (Less Than Truckload)

    A shipment weighing less than the weight required for the application of the truckload rate. These smaller shipments are often combined to create full truckloads.

15. Lift gate

    A mechanism on the back of cargo trucks that allows the driver to load and unload goods more easily. A lift gate is usually required for shipments picked up or delivered to a destination with no shipping dock.

16. Parcel Service Failure

    When you order an item from a retailer, you’re effectively creating a contract between the two of you, even if it’s not written down. If your parcel is late you may opt to contact the courier first, even though it’s the retailer you will need to deal with in order to get compensation. Alternatively, there is a parcel failure refund service, which identifies late or lost deliveries and guarantees your shipment will arrive or be refunded to you no matter what happens.

17. Reefer

    A temperature controlled container that keeps cargo such as food at the proper temperature throughout the transportation process.

18. Shipper’s Agent

    A shipper’s agent is not a carrier, freight forwarder or broker. Shipper’s agents generally arrange for truckload or container load shipment transportation. Shipper’s agents commonly provide services related to warehousing or loading and unloading.

19. Tariff

    A Tariff is a document setting forth applicable rules, rates and charges (often in the form of additional taxation) to move goods. A tariff sets forth a contract for the shipper, the consignee, and the carrier

20. Tender

    A fixed price offered to move cargo.

21. Third-Party Logistics (3PL)

    A term used when distribution services are outsourced through a third-party. Brimich Logistics may be considered a third-party global logistics company.

22. Transportation Management System

    Often abbreviated to TMS, this is specific software that allows freight forwarders to easily analyze and automate transportation operations. It’s especially beneficial for companies handling large amounts of commercial cargo.

23. Truckload (TL)

    Large-volume shipment from a single customer that weighs more than 10,000 pounds or takes up a complete trailer space so no other shipment can be loaded.

The Benefits of Working With a Freight Broker

For a small business, a freight broker can eliminate a lot of the anxiety surrounding freight shipping.  Therefor it’s helpful to have a good handle on basic terminology.

Speaking the same language will ensure clear communication and hopefully as mentioned, prevent misunderstandings.